Facing the saturation of the mobile phone industry, right from the end of 2017, early 2018 FPT Retail (FRT), similar to Mobile World (MWG), has also found its own ways. Paralleling the pharmaceutical segment, taking advantage of the available distribution channel FPT Retail decided to promote the chain F.Studio – specializing in trading Apple products – this is considered one of the three key business strategies of the business in this period.
Talking about the reasons for choosing to sell "apple" products, FPT Retail said that besides its existing chain of stores, Vietnam is the third market in Apple's distribution channel, behind Thailand and Singapore. Soon after taking the opportunity, right from 2014 FPT Retail imported genuine Apple products, after 2 years, the Company established 80 Apple Corner experience zones.
Apple products are "cylinders" that contribute a strong increase of 2017 profit margin – up to 29%
Entering 2017 is the first year Apple officially opened Apple Vietnam, FPT Retail has become a pioneer with a full retail chain of Apple stores including: Level 1 is APR (Apple Premium Reseller ), Level 2 AAR (Apple Authorized Reseller) and iCorner. FPT Retail stores have an average area of 75 – 100 m2 and are hired with long-term contracts to ensure stable business operations during the lease period.
This strategy in 2016-2017 proved quite effective when sales from Apple products continued to increase, dragging the Group's revenue to grow strongly, profit margin also followed the upward momentum. Noting at the end of 2017, sales of Apple products through the F.Studio series increased by 38.9% compared to 2016, the reason why Apple continuously launched a series of new products such as Iphone X, Iphone 8 , Iphone 8 plus with many outstanding features, high resolution, fast processing speed and large capacity to meet the needs of consumers.
This year's profit margin increased to 29%, with the momentum pulled by the Apple line. FPT Retail has also aggressively tripled this "fertile" chain, from 4 stores (in 2016) to 12 units by the end of 2017.
Profit margin in 2017 increased to 29%, with the momentum pulled by Apple.
But, by 2018, "big man" Apple sunk into a difficult period in the development of the iPhone business – at least in terms of sales of phones each year – when Apple's growth is slowing. far more than other brands. For example, iPhoneX product line – this is considered the failure line of Apple with the number of operations only by the iPhone SE line – the cause by experts who have to spend at least 1,000 USD for the latest iPhone X, even $ 1,150 for the higher-memory version, while the features are not really attractive.
"For iPhone, there is only one word problem, the product".
For FPT Retail, cooperating with Apple on the law of playing "boat up water and vice versa", made the company last year tasted bitter fruit for this "flawed apple" product group. By the end of 2018, the number of F-studio chain stores (including APR and AAR side-by-side stores) reached 14 units, contributing VND423 billion to the Group's total sales, despite a 61% increase, but The profit margin recorded as a decline, the gross profit margin of FPT Retail was only 13.4% (compared to 13.8% in 2017).
Sharing about this decline, Mrs. Diep emphasized: "For iPhone, there is only one problem, the product". In other words, the iPhone item is welcomed by customers depending on whether the product is good, attractive, nothing new and how much it is.
For years, customers were looking forward to every year in November, the iPhone will launch a new product, and the market at that time was really looking forward to, even tumbling to own the first new machine. However, in the last two years and especially in 2018, Apple's strategy has changed, new products launched in terms of technology, nothing revolutionary design; on the contrary, the price pushed up to a very high level. This is invisible to users who no longer feel compelled to decide to change a new device, so many people last year no longer participate in buying or exchanging new iPhones, Diep said.
In particular, in the process of cooperating with Apple, CEO Nguyen Bach Diep acknowledged before the traditional rules of Apple or the decision to change … no one knows, the whole story of units like FPT Retail is only located at the product they give, "nIf the product is attractive, well received, the whole village is asked, or vice versa".
In general, the company also got lessons in this area, Mrs. Diep affirmed.
There has been lessons with Apple, 2019 will not open new F.Studio series
In the 2019 action plan, for F.Studio series, FPT Retail will not open new F.Studio due to unfavorable iPhone business results. Because, the new iPhone series did not generate revenue as expected, negatively affecting the business results of the first 2 months of 2019 of the Group. In addition, the new product line of iPhone is facing many challenges in Vietnam, affecting the business results of F.Studio series. In this context, FPT Retail decided not to open a new F.Studio store in 2019 without receiving additional support policies from Apple.
"For many years ago, FPT Retail did not really know about this, but fortunately the product was very" good ", leading to good harvest. The problem of some product groups, the Company starts up the contingency plans", Mrs. Diep asked the question, "If this problem continues, what will it do, what will replace it? ". In general, the company also got lessons in this area, Mrs. Diep affirmed.
Although the year 2018 is not positive, however, securities companies' view is that in 1/2019 due to iPhone's profit margin recovered and strong growth in sales and gross profit margin of accessories segment. In the period 2020-2021, Ban Viet Securities (VCSC) forecasted the gross profit margin of iPhone will continue to recover.